Correlation Between WILLIS LEASE and Calibre Mining

Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE and Calibre Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining WILLIS LEASE and Calibre Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WILLIS LEASE FIN and Calibre Mining Corp, you can compare the effects of market volatilities on WILLIS LEASE and Calibre Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in WILLIS LEASE with a short position of Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and Calibre Mining.

Diversification Opportunities for WILLIS LEASE and Calibre Mining

-0.61

Correlation Coefficient

WILLIS LEASE  Calibre Mining

Excellent diversification

The 3 months correlation between WILLIS and Calibre is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp and WILLIS LEASE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on WILLIS LEASE FIN are associated (or correlated) with Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of WILLIS LEASE i.e., WILLIS LEASE and Calibre Mining go up and down completely randomly.

Pair Corralation between WILLIS LEASE and Calibre Mining

Assuming the 90 days horizon WILLIS LEASE FIN is expected to under-perform the Calibre Mining. In addition to that, WILLIS LEASE is 1.21 times more volatile than Calibre Mining Corp. It trades about -0.08 of its total potential returns per unit of risk. Calibre Mining Corp is currently generating about 0.22 per unit of volatility. If you would invest  141.00  in Calibre Mining Corp on December 30, 2024 and sell it today you would earn a total of  66.00  from holding Calibre Mining Corp or generate 46.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

WILLIS LEASE FIN  vs.  Calibre Mining Corp

WILLIS LEASE FIN

Risk-Adjusted Performance

Very Weak

Over the last 90 days WILLIS LEASE FIN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Calibre Mining Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Calibre Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WILLIS LEASE and Calibre Mining

The main advantage of trading using opposite WILLIS LEASE and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE position performs unexpectedly, Calibre Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Calibre Mining will offset losses from the drop in Calibre Mining's long position.

The idea behind WILLIS LEASE FIN and Calibre Mining Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.